Expert: Corey Bryant - 9/2/2004

Question
Southern California

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Followup To
Question -
I am in the process of gearing up to have an on-line business selling products.

This is a really basic question but I am having trouble understanding the difference and relationships between shopping carts, payment gateways and merchant accounts?

I know that shopping carts can be built into a web site or they can be remotely hosted... which is better and why?

Payment gateways... not sure what they are but there seem to be a lot of them.  What are they and how do you choose from all that is offered? Are there particular features to have...or avoid?  Do I really even need one?

Merchant accounts - again, a lot of them.  Any particular features to have or avoid?  Do they work for internet only or can you also call in a purchase over the phone (not an order but if I as merchant, want to sell something and I want to take payment via credit card)?

If this is too much or too basic for you, are there any web sites that will help me understand these concepts?

Thank you

Answer -
Actually before I go into too much detail, can I ask where you are located?

Thanks!

-Corey

Answer
Well hello neighbor :)

The shopping cart is basically the mechanism to allow your consumers to see what products / services you offer.  As far what is better - that all depends.  There are a lot of different options available to you.  I would personally stay away from Miva.  I have a website / hosting that is almost complete - http://www.sitehosting4less.com - we have been hosting for about one year, just now starting to go "public".

For the shopping cart, I would say get something that is DB driven (like ours) and you can take the source code (like ours) if you ever need to change host.  Miva - you cannot do that.  You have to find a host that supports Miva.

Payment gateway is similar to the POS terminal @ Ralph's.  It allows the consumer to connect to the correct issuing bank to approve the transaction.  The major ones in the US are:  LinkPoint, Authorizenet.com and Verisign.  We have been working with LinkPoint for three years.  It has only been down once - January 2002 during a major upgrade. Authorizenet.com has been down twice, once in November 2003 & in August 2004.  Verisign, we have only been working with for about 6 months.  LinkPoint provides a free virtual terminal as well for free so that you can process a CC yourself over the internet while your customer is on the phone.

The CC processor is the other company that you need to complete the merchant account.  It makes sure that you get your money.  There are a number or processor: Cardservice, CDG, Nova, Well Fargo, Chase.  Most banks actually outsource the processing to another company.  Chase has a partnership with First Data (the company that owns Cardservice).  

Most websites to talk about the merchant acounts have an ulterior motive.  I am working on a site now to hopefully help people understand them a little bit better.  

If you want - we also resell for Cardservice (CSI) - http://www.merchantaccounts4less.com - CSI has been in business since 1988.  They are now owned fully by First Data.  First Data also owns Western Union & Telecheck.  Ours is also http://www.merchantaccounts4less.com - the e-mail / contact form goes to me on there.  

The only ones that I have heard some bad things about was e-onlinedata & Worldpay.  E-onlinedata would be an option, but too many things have happened with them.  I would also stay away from Paysystems.  

If you are not going to be processing at least $1,000 a month, you might consider a third party - like 2checkout.  But you will not have the virtual terminal.

Also feel free to contact me or ask more specific questions if you want.

-Corey